How to Finance a Day Trading Hobby

Day traders are a diverse crowd. Some are stay-at-home non-professionals looking to play the market; others are investment pros who have decided to go it alone. Whichever you are, it's important to start out with enough capital.

Instructions

1. Borrow against your long term investments. Taking out money against your IRA, 401-K, stocks and CDs is one way to get a loan at a reasonable price. Of course, you won't want to borrow more than you can afford to spare from your future.

2. Mortgage your house. This is another way to finance day trading, as most people have equity in their homes. However, offering up your house against your day trading abilities is risky business.

3. Manage other people's money. Some day traders take on investments for individuals who want to make some cash. The law limits how many people can invest with you at a time, but it's always better to play with cash that's not yours.

4. Save your money. If borrowing doesn't sit well with you, get money together the old fashioned way: by earning it. If you start putting 10 percent of your income aside with each check, you'll have the capital to finance a day trading habit before you know it.

5. Inherit money from a wealthy distant relative. It's what old great aunts and third cousins are made for: to present you with a life-altering lump of cash upon their timely demise. Just don't let the grief consume you.